Debt and pensions are holding Italy’s economy back. EU criticizes superbonus scheme

BRUSSELS – Italy will have a better growth rate than others (0.9 percent) in 2024, reflecting ailing Europe even as there are frightening signs of recovery. In 2025, GDP will avoid being at the bottom of the list for performance (1.1 percent, 1 percent worse than German GDP). But the European Commission’s spring economic forecasts for the country aren’t all roses, starting with public accounts and public debt predicted to explode by 2025.

Compared with Autumn Predictions, The EU reduced its debt-to-GDP ratio to 137.3 percent (from 139.8 percent) and 138.6 percent (from 140.6 percent) for 2023 and 2024, respectively. But it adds almost a point to 2025, where debt is expected to be 141.7 percent of GDP, rather than 140.9 percent. Additionally, the deficit situation will lead the country to excessive deficit practice. 7.4 percent will be reduced to 4.4 percent by the end of this year and will rise to 4.7 percent next year.

As Brussels notes, in Italy, Current primary expenditure growth is driven by the schedule of pensions Even higher inflation in 2023 and the renewal of public wages in 2022-2024 are partially offset by some savings in the expenditure review (0.1 percent of GDP). Monetary policy decisions also weigh in. Higher interest rates on new bond issues are expected to stimulate interest payments 4.0% of GDP.

Then there is lunch at Superbonus. The EU executive believes that in the future, stock-flow adjustment will play an important role in credit growth, as tax credits for home renovation, recorded on an already accumulated basis in the deficit, will begin to be fully reflected in cash flows. : „Coupled with a less favorable interest-growth-rate differential, this would lead to an increase in the debt ratio. 141.7% of GDP by 2025.

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By English version Withub’s translation service

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